Up close and personal ? : customer relationship marketing at work

Establishing long-term relationships with customers is increasingly seen as being critical to business success -- this book goes one step further and shows how to implement it and reap the benefits, and it can reap enormous benefits, as some of the world's leading companies have shown. Wal-mart, for example, spent millions of dollars on developing its customer database which enabled it to personalise its communications. Is it coincidence that it became one of the world's most successful retail chains within a decade? Up Close and Personal? shows that there is no coincidence about it.

Author Notes

Paul R Gamble is the Professor of European Management at the University of Surrey, UK. He is also Director of the Surrey European Management School (SEMS) the University's graduate business school.
Merlin Stone is IBM Professor of Marketing at SEMS.
Neil Woodcock has worked on customer management projects with multi-national companies in Europe, the Far East, South Africa and the USA.

Excerpts

1 Customer relationship marketing: one more time? 1 The times they are a changin' 1 Customer relationship marketing is more important than ever before 7 Is customer relationship marketing profitable? 9 Customer-led or market oriented? 12 What's different about customer relationship marketing? 15 Problems with functional marketing 20 The evolution of customer relationship marketing 22 The basis of a customer relationship marketing audit 25 Gaining a competitive edge 28 The new challenge for CRM 30 So, why do marketers need better customer insights? 36 Personal contact 37 Summary 40 2 Relationships with customers 41 Who is a customer? 41 Levels of relationship 47 The eight building blocks of customer relationship marketing 50 Distorting the buying decision in your favour 57 Business-to-business buying models 62 Customer relationship marketing and the sales process 65 Summary 68 3 Buy-in, policies and plans 69 Buy-in top to bottom 69 Strategy as fit and strategy as stretch 70 Stretching the organization 75 Top down leadership 87 Bottom up management 91 Core process redesign 94 Beginning the transition 99 Summary 102 Checklist for REAP planning 103 4 Measuring the impact 108 Marketing effectiveness 108 Key performance indicator (KPI) measures 115 The KPI hierarchy 117 Quantifying relationship marketing 121 Summary 138 5 Segmentation and the top vanilla offer 140 Traditional and relationship marketing planning 140 Developing the capability for relationship marketing 151 Customer management differentiation 152 Segmentation 154 A practical approach to segmented relationships 163 The top vanilla approach 165 Key principles of top vanilla 166 The risks of top vanilla 170 Summary 170 6 Getting the show on the road 173 The implementation programme 173 Evaluating current practice 175 Developing the business case 179 Customer contact strategy 184 Putting value segmentation into practice 190 Customer management key performance indicators 207 Summary 209 7 Customer loyalty and continuity 210 What is customer loyalty? 210 Loyalty and product type 217 Which customers do you want to be loyal? 220 Customer acquisition - six steps to success 226 Customer retention - six steps to success 230 Loyalty management - six steps to success 233 Are loyalty schemes win-win? 238 Summary 243 8 The customer experience, transparent marketing, and customer value management 244 Managing the customer experience 244 Do customers want transparent relationships? 253 Customer value management and process contribution assessment 262 Summary 274 9 Customer knowledge management 276 Why manage knowledge? 276 Innovation and knowledge management 281 Tacit knowledge, explicit knowledge and products 287 Implementing knowledge management - critical success factors 292 Making knowledge management a reality - seven steps to success 294 Customer knowledge management and organizational alignment 296 Summary 308 10 Technology and customer management systems 310 Has customer relationship marketing technology delivered the goods? 310 Basic approaches to customer data management 315 A best practice approach 321 The customer management architecture 331 Summary 333 11 Managing good and bad customers 335 Is it worth having a loyalty programme? 335 What is a good customer? 341 What is a bad customer? 343 Predicting goodness and badness 345 Managing the risk 356 Dealing with complaints 360 The customer perspective 362 Organizational and business customer management strategies 367 Summary 370 12 Justifying the CRM investment 372 Delivering customer value through relationship marketing 372 Satisfying the board 381 Keys to achieving the most from your customer relationship marketing investments 394 So what next? 399 Customer relationship marketing and marketing revolution 404 Summary 405 Excerpted from Up Close and Personal?: Customer Relationship Marketing @ Work by Merlin Stone, Neil Woodcock, Bryan Foss, Paul R. Gamble All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

Forewords	p. vii
Acknowledgements	p. ix
1 Customer relationship marketing: one more time?	p. 1
Why is relationship marketing important?	p. 3
Is customer relationship marketing profitable?	p. 4
Customer-led or market oriented?	p. 7
What's different about customer relationship marketing?	p. 10
Problems with functional marketing	p. 13
The evolution of customer relationship marketing	p. 15
The basis of a customer relationship marketing audit	p. 18
Gaining a competitive edge	p. 21
Virtual products and services	p. 23
Personal contact	p. 27
Summary	p. 29
2 Relationships with customers	p. 31
Who is a customer?	p. 31
Levels of relationship	p. 37
Consumer buying models	p. 40
Business-to-business buying models	p. 47
Customer relationship marketing and the sales process	p. 50
Summary	p. 53
3 Buy-in, policies and plans	p. 54
Buy-in top to bottom	p. 54
Strategy as fit and strategy as stretch	p. 55
Transforming the organization	p. 60
Top down leadership	p. 64
Bottom up management	p. 68
Core process redesign	p. 71
Summary	p. 78
Checklist for REAP planning	p. 78
4 Measuring the impact	p. 83
Ten guidelines for a relationship marketing strategy	p. 83
Key performance indicator (KPI) measures	p. 87
The KPI hierarchy	p. 90
Quantifying relationship marketing	p. 93
Fixing the budget	p. 106
Summary	p. 108
5 Segmentation and the top vanilla offer	p. 110
Traditional and relationship marketing planning	p. 110
Developing the capability for relationship marketing	p. 118
Customer management differentiation	p. 119
Segmentation	p. 121
A practical approach to segmented relationships	p. 130
The top vanilla approach	p. 132
Key principles of top vanilla	p. 134
The risks of top vanilla	p. 139
Summary	p. 139
6 Getting the show on the road	p. 141
Introduction	p. 141
Barriers to implementation	p. 141
The implementation programme	p. 145
Evaluating current practice	p. 147
Developing the business case	p. 151
Customer contact strategy	p. 156
Customer management key performance indicators	p. 165
Summary	p. 167
7 Customer loyalty and continuity	p. 168
What is customer loyalty?	p. 168
Loyalty and product type	p. 174
Which customers do you want to be loyal?	p. 176
Customer acquisition - six steps to success	p. 180
Customer retention - six steps to success	p. 184
Loyalty management - six steps to success	p. 188
Are loyalty schemes win-win?	p. 193
Summary - ten steps to successful loyalty schemes	p. 194
8 Transparent marketing, customer value and process management	p. 197
Transparent marketing	p. 197
Do customers want transparent relationships?	p. 203
Customer value management and process contribution assessment	p. 212
Summary	p. 224
9 Customer knowledge management	p. 226
Why manage knowledge?	p. 226
Tacit knowledge, explicit knowledge and products	p. 235
Implementing knowledge management - critical success factors	p. 241
Making knowledge management a reality - seven steps to success	p. 242
Customer knowledge management and organizational alignment	p. 245
Summary	p. 258
10 The technical part - systems and data	p. 259
The role of systems	p. 259
Tactics and strategy	p. 263
Choosing the first project	p. 271
Updating current IT systems	p. 278
Supporting hybrid channel management	p. 280
The role of the data warehouse	p. 282
Combining analysis and action	p. 284
The impact of mergers and acquisitions	p. 286
Summary	p. 287
11 Managing good and bad customers	p. 291
The moral maze	p. 291
What is a good customer?	p. 294
What is a bad customer?	p. 296
Predicting goodness and badness	p. 296
Managing the risk	p. 305
Dealing with complaints	p. 310
The customer perspective	p. 312
Organizational and business customer management strategies	p. 317
Summary	p. 320
12 Where do we go from here?	p. 322
We need the eggs	p. 322
Some marketing paradigms	p. 325
Some paradoxes	p. 330
The road to the future	p. 337
Summary	p. 339
Appendix A complete relationship marketing planning recipe	p. 342
References	p. 351
Index	p. 356

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